Tandem Diabetes Care Announces Proposed Private Placement of Convertible Notes - Seite 3

In connection with any note repurchase transaction, Tandem expects that holders of the 2025 notes who agree to have their 2025 notes repurchased and who have hedged their equity price risk with respect to such notes (the “hedged holders”) will unwind all or part of their hedge positions by buying Tandem’s common stock and/or entering into or unwinding various derivative transactions with respect to Tandem’s common stock. The amount of Tandem’s common stock to be purchased by the hedged holders or in connection with such derivative transactions may be substantial in relation to the historical average daily trading volume of Tandem’s common stock. This activity by the hedged holders could increase (or reduce the size of any decrease in) the market price of Tandem’s common stock, including concurrently with the pricing of the notes, resulting in a higher effective conversion price of the notes. Tandem cannot predict the magnitude of such market activity or the overall effect it will have on the price of the notes or Tandem’s common stock.

Additionally, in connection with the issuance of the 2025 notes, Tandem entered into capped call transactions (the “existing option transactions”) with certain financial institutions (the “existing option counterparties”). To the extent Tandem effects any note repurchase transactions, it intends to enter into agreements with the existing option counterparties to terminate a portion of the existing option transactions in a notional amount corresponding to the amount of 2025 notes repurchased (such terminations, the “unwind transactions”). In connection with any such termination of any of the existing option transactions, Tandem expects such existing option counterparties and/or their respective affiliates will unwind various derivatives with respect to Tandem’s common stock and/or sell shares of Tandem’s common stock concurrently with or shortly after pricing of the notes. This activity could decrease (or reduce the size of any increase in) the market price of Tandem’s common stock at that time and could decrease (or reduce the size of any increase in) the market value of the notes.

As discussed above, Tandem also intends to use up to $30.0 million of the net proceeds from the offering to repurchase shares of its common stock. Tandem expects to repurchase such shares from purchasers of notes in the offering in privately negotiated transactions with or through one of the initial purchasers or its affiliate concurrently with the pricing of the offering (the “share repurchases”), and Tandem expects the purchase price per share of Tandem’s common stock repurchased in the share repurchases to equal the closing price per share of Tandem’s common stock on the date of pricing of the offering. These share repurchases could increase, or reduce the size of any decrease in, the market price of Tandem’s common stock, including concurrently with the pricing of the notes, resulting in a higher effective conversion price for the notes. No assurance can be given as to how much, if any, of Tandem’s common stock will be repurchased or the terms on which they will be repurchased. This press release is not an offer to repurchase Tandem’s common stock, and the offering of the notes is not contingent upon the repurchase of Tandem’s common stock.